Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Dear brother Borhan

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.

Thanks for your reply. I am in confusion and my undersatnding is as follows.

If I don't have cash problem I can treat the loan as Sadqah but I can also treat it as Zakat at finanacial condition. Do I need to tell the person that I am giving as Zakat. Thanks Shabbir Ahmed Could you advise if I get money from any one or I had lended before, if he cannot able to refund the amount on time or forever, If i forgive or can I treat it as Zakat.

Looking forward to hear from you at earliest.

Thanks

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Answer:

Convert loan to Zakah

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.

One of the conditions when rendering zakah is that the person who pays it must have an intention that he is paying the zakah dues. Thus the scholars in Islam do not hold it permissible that an amount given in loan be converted to zakah when the person is unable to pay it back. It would be considered righteousness and a form of ‘sadaqah’ if one forgives the loan, but it cannot be converted into zakah.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 280: If the debtor is in a difficulty grant him time till it is easy for him to repay. But if ye remit if by way of ‘sadaqah’ (charity), that is best for you, if ye only knew.

If the loan is such that one is doubtful whether the debtor will ever pay the loan back or not; then there is no zakah due on it. If and when the debtor actually pays the loan back, then the person should pay the zakah on that amount.

Your Question: Do I need to tell the person that I am giving as Zakat.

One of the conditions of rendering zakah is that the person, at the time of paying it, must have an intention that he is paying his zakah dues. One is not required to, neither obligated to inform the person receiving the amount that it is from zakah; but if one does inform them for any reason there is no harm. It is possible that when informed that the amount is from zakah, the self-pride of the person receiving it might be dented; thus it would be considered righteousness in the sight of the Lord if a believing brother respects and upholds the honor of his needy brother.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.

Your Brother in Islam,

Burhan